Building Your Practice: The Value of a Third Party Administrator

If ever there was an opportunity for retirement-focused and wealth management advisors to build out their defined contribution plan business, this may be it.

As SECURE 2.0 builds on ERISA provisions, incentivizes business owners to offer plans, and expands eligibility for millions of American workers, advisors have an unprecedented opportunity to grow their practice and build their assets under management.

But this opportunity doesn't come without challenges.

Retirement plan administration and fiduciary responsibilities are becoming more time consuming and complicated. As employers and plan sponsors look to their plan advisors for support, you may be wondering who’s there to help you reduce the workload?

If you haven’t considered partnering with a third party administrator (TPA) that works to ensure a company's qualified retirement plan complies with all legal requirements (e.g., document preparation and preparing annual nondiscrimination testing), maybe it’s time you do. To understand why, consider some of the advantages a TPA relationship can bring to your clients and your business.

 

Playing to your strengths

Keeping up with evolving regulatory requirements, shifting best practices, compliance and other administration tasks can be a significant burden on your time and resources. For many advisors, partnering with a TPA can be more cost effective and time-efficient than doing the same work in-house. Most TPAs have a local presence and are available to meet with prospects and existing clients to discuss compliance and plan design.

Working in collaboration with a TPA allows you to put deep technical expertise to work for you, helping to ensure your clients’ plans are managed with efficiency, accuracy and compliance. The bonus to your business: working with a TPA to handle the heavy lifting of these and other tasks can free you up to focus on what you do best: deepening your client relationships and managing your clients' assets.

 

Putting plan design into action

One of the biggest advantages of using a TPA is that they are experts in plan design, helping to resolve client pain points and provide tailored solutions to meet their goals now, and into the future. Flexible, tailored plan solutions can help drive better outcomes. When plan design accurately reflects a clients’ employee demographics and needs, it also can boost participation and engagement, helping to strengthen your clients’ confidence in your advisory services.

Keeping clients close. We all know why client “stickiness” matters; the more value you provide to clients, the less likely they may be to switch plan providers. Having a TPA by your side to field technical questions about complex rules and regulations can help you build credibility, especially when you’re pitching new ideas or meeting with clients to provide a plan update.  Among the plans we serve, we see a nearly 2% increase in retention for plans using a TPA.

Uncovering new opportunities. One of the best ways to grow your practice is through referrals. TPAs are often a trusted partner for business owners and plan sponsors in their own right. This can make them a great source of referrals and new business opportunities when one of their clients is looking for a new advisor.

Finding the needle in a haystack

So, how do you make sure you and your TPA partner are a good fit? The reality is, of course, that all TPAs are not created equal; they offer different strengths and solutions, and often have significantly different ideas about what it means to deliver customer service excellence.

As you consider your options, make certain that the TPA you choose is:

• Experienced and reliable, with the breadth of services and solutions needed to handle all aspects of retirement plan administration
• Aligned with your values and work ethic
• Proactive problem solvers with the technical expertise to effectively resolve plan issues
• Committed to delivering a great client experience in the interest of building long-term relationships
• A clear and timely communicator – someone who is able to address questions and concerns with intelligence and, yes, kindness

For more on the value of a TPA, download our newest sales tool, Enhance Your Practice With Our TPA Services, here. You’ll want to share it with current and prospective clients to help illustrate the value a TPA can bring to their retirement plan.

We also invite you to schedule a call; one of our Regional Vice Presidents will show how Ascensus delivers the personalized retirement plan solutions that can help you and your clients build financial security for the future.

 

Let’s Get There, together.

Ascensus, LLC provides administrative and recordkeeping services and is not a broker-dealer or an investment advisor, and does not provide tax, legal, accounting, or investment advice.